There is no limit to the number of traditional individual retirement accounts (IRAs) that you can establish. But you'll still be subject to your annual maximum contribution limits, so you cannot simply max out each account that you have. In other words, if you have, say, a traditional and a Roth IRA, you can contribute $3,000 to each this year, but no more than $6,000 combined.

You must also have eligible compensation, which includes wages, salary, or self-employment income for any year you contribute. That leaves out income from things like pensions, annuities, interest, dividends, and rentals.

Key Takeaways:

  • There is no limit to the number of traditional individual retirement accounts, or IRAs, that you can establish.
  • However, if you establish multiple IRAs, you cannot contribute more than the contribution limits across all your accounts in a given year.
  • If your spouse has little or no income, you are allowed to make contributions on their behalf, which can double the amount of money saved for retirement.
  • Each account may have associated fees that affect the returns on the accounts overall.

Initial Considerations

The Setting Every Community Up for Retirement Enhancement (SECURE) Act, which went into effect in December 2019, eliminates the maximum age for traditional IRA contributions, which was previously capped at 70½ years old. 

A Roth IRA can also be established at any age, as long as you have eligible compensation and meet the income requirements.

IRA Contribution Limits

Keep in mind that regardless of the number of IRAs you maintain, you still cannot contribute in total more than the annual contribution limits. For 2020, you are allowed to contribute 100% of your compensation up to $6,000 (or $7,000 if you are 50 or over).

All regular IRA contributions must be made in cash (which includes checks), not in securities. You can divide up the permitted contribution among your IRAs or contribute the whole amount to one IRA.

Spousal Contributions

If your spouse has little or no income, you are allowed to make contributions on their behalf—commonly known as spousal IRA contributions. The same rules apply as those for traditional IRA contributions. Your spouse will have their own IRA account since IRA accounts are not allowed to be held jointly. This allows a family to double the amount of money set aside for retirement.

Up to $100,000 can be taken from retirement accounts without incurring the 10% early withdrawal penalty by person impacted by the coronavirus pandemic.

Here are the requirements for opening a spousal account:

  • You must be married and file a joint tax return.
  • You must have eligible compensation to make contributions.
  • The total contribution for both you and your spouse cannot be more than your taxable compensation reported on your joint tax return.

The Bottom Line

If you decide to establish multiple IRAs, remember that annual maintenance fees may apply to each IRA. These fees can average from $50 to $100 per year. Fees can eat into your returns, so it is important to be knowledgeable about all of your retirement account fees.